Bilateral Investment Treaties, Political Risk and Foreign Direct Investment

Kim, Sokchea (2006): Bilateral Investment Treaties, Political Risk and Foreign Direct Investment. Published in: Asia Pacific Journal of Economics & Business , Vol. 11, No. 1 (June 2007): pp. 6-24.

Abstract

The study constructs a linear model to evaluate the significant impacts of bilateral investment treaties (BITs) on foreign direct investment (FDI) and the possible consequences of BITs. The results show that BITs have significantly promoted FDI, and their effects are substitute for the level of political risk in a country. Another interesting finding is that BITs signed with non-OECD countries should not be overlooked. By estimating the growth of FDI resulting from an additional BIT ratified, the finding further indicates that BITs are more potential for most Asian countries to promote FDI. On average, a BIT ratified by a country in South, East, and South-East Asia can raise FDI by around 2.3 percent.

• Item Type: MPRA Paper
• Language: English
• Keywords: Bilateral investment treaties, foreign direct investment, political risk
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; K - Law and Economics > K3 - Other Substantive Areas of Law > K33 - International Law; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements

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